A U.S. judge on Sunday approved General Motors Corp's bankruptcy sale in a move that will allow the company's most profitable assets to exit bankruptcy protection under government ownership.
Judge Robert Gerber of the U.S. bankruptcy court in Manhattan said the sale would "prevent the death of the patient on the operating table."
Gerber issued a four-day stay of the order approving the sale, which should allow it to close as early as Thursday. Such stays are typical and allow for possible appeals.
Under the deal, 'New GM' will operate the best parts of the old company, including its Chevrolet and Cadillac brands, with a less expensive workforce, smaller dealer network, and much less debt. The rest of the company will be liquidated.
The sale marks the second big victory for the Obama administration's auto task force. It helped broker the disposal of Chrysler LLC to a group led by Italy's Fiat SpA last month.
GM, which filed for bankruptcy protection on June 1, had argued that it would be forced to liquidate if the sale was not approved, and the U.S. government said it could walk away from funding the automaker if a deal was not approved by July 10.
'BUSINESS DECISION'
"GM cannot survive with its continuing losses ... and without the governmental funding that will expire in a matter of days," Gerber wrote in the 95-page opinion.
The judge rejected claims from a group of bondholders that GM could have restructured itself under a more traditional Chapter 11 reorganization plan, in which creditors would have been able to vote.
